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168. A properly constructed segmented income statement in a contribution format would
show that the net operating income of the company as a whole is:
Stryker Corporation has two major business segments-East and West. In April, the East
business segment had sales revenues of $500,000, variable expenses of $280,000, and
traceable fixed expenses of $80,000. During the same month, the West business segment had
sales revenues of $970,000, variable expenses of $514,000, and traceable fixed expenses of
$184,000. The common fixed expenses totaled $280,000 and were allocated as follows:
$112,000 to the East business segment and $168,000 to the West business segment.
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
169. The contribution margin of the West business segment is:
170. A properly constructed segmented income statement in a contribution format would
show that the segment margin of the East business segment is:
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171. A properly constructed segmented income statement in a contribution format would
show that the net operating income of the company as a whole is:
Canon Company has two sales areas: North and South. During last year, the contribution
margin in the North Area was $50,000, or 20% of sales. The segment margin in the South was
$15,000, or 8% of sales. Traceable fixed expenses are $15,000 in the North and $10,000 in the
South. During last year, the company reported total net operating income of $26,000.
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
172. The total fixed expenses (traceable and common) for Canon Company for the year were:
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Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
173. The variable expenses for the South Area for the year were:
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
Data for June for Ozaki Corporation and its two major business segments, North and South,
appear below:
In addition, common fixed expenses totaled $145,000 and were allocated as follows: $73,000
to the North business segment and $72,000 to the South business segment.
174. The contribution margin of the South business segment is:
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
175. A properly constructed segmented income statement in a contribution format would
show that the segment margin of the North business segment is:
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176. A properly constructed segmented income statement in a contribution format would
show that the net operating income of the company as a whole is:
Falquez Company sells three products: R, S, and T. Data for activity of Falquez Company
during July are as follows:
Common fixed expenses for July amounted to $90,000.
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
177. Net operating income for the company was:
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
178. The contribution margin for Product R was:
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Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
179. The segment margin for Product T was:
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Essay Questions
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180. The EG Company produces and sells one product. The following data refer to the year
just completed:
Assume that direct labor is a variable cost.
Required:
a. Compute the cost of a single unit of product under both the absorption costing and variable
costing approaches.
b. Prepare an income statement for the year using absorption costing.
c. Prepare a contribution format income statement for the year using variable costing.
d. Reconcile the absorption costing and variable costing net operating income figures in (b)
and (c) above.
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Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
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181. Maga Company, which has only one product, has provided the following data
concerning its most recent month of operations:
Required:
a. What is the unit product cost for the month under variable costing?
b. What is the unit product cost for the month under absorption costing?
c. Prepare a contribution format income statement for the month using variable costing.
d. Prepare an income statement for the month using absorption costing.
e. Reconcile the variable costing and absorption costing net operating incomes for the month.